Home loan burden will be reduced, 12 to 18 lakh rupees will be saved on a loan of 50 lakh rupees; Expert reveals the trick
If you're troubled by the constant EMIs of your home loan and want to get rid of this burden quickly, here's some good news. A clever trick from an expert can help you save between ₹12 lakh and ₹18 lakh on a ₹50 lakh loan.
If you're tired of paying off your home loan and wondering when this burden will end, there's good news for you. Chartered accountant Nitin Kaushik has revealed a trick that can save you a significant amount of ₹12 to ₹18 lakh on a home loan of ₹506 million.
Most importantly, this method is neither complicated nor requires significant additional income. Just a small change in your EMI payment method can help you pay off your loan faster, saving years of interest.
Why are home loans so expensive?
The biggest problem with home loans is the long term and high interest. You take out a loan of ₹50 lakh, but by the time you repay the bank, the amount can reach around ₹1 crore.
This is why people often end up paying EMIs for 20-30 years, consuming a significant portion of their life's savings in interest. But with a little smart planning, the interest burden can be significantly reduced.
Expert advice: Split EMIs, reduce interest
Nitin Kaushik explains that most people pay EMIs once every month, which translates to 12 EMIs per year. The trick is to split the EMI into two parts instead of paying the full EMI in one go, and pay half the EMI every 15 days.
The simple math is that one extra EMI adds up. If you pay half an EMI every 15 days, there are 26 half EMIs in a year, or 13 full EMIs in total.
This means you pay one more EMI each year without any additional burden. This extra EMI is added directly to your principal. This reduces your loan balance quickly and the interest also starts decreasing rapidly.
How much will be the savings on a loan of Rs 50 lakh?
If your loan is for Rs 50-60 lakh and the interest rate is between 89%, then the loan can be repaid 67 years earlier and you can save interest up to Rs 1218 lakh, which means not only will the EMI burden end quickly, but you will also save lakhs of rupees in your entire life.
Does every bank provide this facility?
Before using this trick, check your bank's policy, as not all banks offer payment every 15 days. If your bank offers bi-monthly or part-payment options, this method could prove extremely beneficial.